The “Sweet Spot” in Strategic Alliances

Although strategic alliances are often beneficial for participating firms, prior to the alliance the two companies should be aware of the nature of their professional relationship. While two companies may perform well individually, they may need to adjust after the strategic alliance due to the differences between them. Even if the firms are within the same industry, they may have contrasting business operations or goals based on their staff, customers, or resources. While such differences may present themselves as an obstacle at first, the key to a strategic alliance is to work off the other participating company in order to build a better working relationship.

A recent article by LifeHealthPro discusses the benefits of strategic alliances and offers suggestions on how to build them. John Napolitano, a CPA and contributor to the article, explains that the two companies need to find their “sweet spot” in their professional relationship for the most possible strategic alliance:

“Forming professional relationships takes time. Advisors need to learn about the other professionals’ current client base, their sweet spot in terms of ability, their favorite types of clients and the depth of their resources or staff. I prefer to have one or two at most within each area of expertise. This is helpful toward building a better working relationship and enhances the possibility that you may begin a reciprocal relationship for business development.”

A strategic alliance has the potential to increase the overall profits between the two companies, but at first, it may interfere with the companies’ everyday business operations. While one company may market itself to a younger audience, the other may target an older, wealthier segmentation. However, as Mr. Napolitano explains, once the companies find the “sweet spot” of their professional relationship, the companies will be able to deliver to their clients in a more effective, efficient way than ever.

If you would like more information about the professional relationships within a strategic alliance, contact us.


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